New Data and Tools Shine a Light on Energy Efficiency as a Job Creation Powerhouse
May 7, 2019
Policy Director, Efficiency Canada
New Research shows energy efficiency employs 436,000 workers in Canada. More than oil and gas extraction or telecommunications.
The numbers are in. Two major reports have officially established the energy efficiency sector as a top job creator in North America.
Last month, the National Association of State Energy Officials (NASEO) and the Energy Futures Initiative (EFI) released the U.S. Energy and Employment report (USEER) 2019. Once again, the energy efficiency sector produced more new jobs in 2018 than any other energy sector in the U.S., reaching a grand total of 2,324,866 jobs. This represents a 3.4% increase in job growth in the field over the previous year. What’s more, energy efficiency employers have high expectations for 2019, predicting a job growth rate of 7.8%.
This week, Eco Canada released their report, Energy Efficiency Employment in Canada, also examining revenue and employment trends for 2018 and making projections for 2019. Key takeaways from their report include:
- The energy efficiency sector employed 436,000 workers across 6 key industries in 2018 – that’s about 2.3% of all jobs in Canada. For comparative purposes 204,000 people are employed in mining, quarrying and oil and gas extraction, and 123,000 are employed in telecommunications.
- Across 6 key industries, 51,000 Canadian business establishments generated an estimated $82.6 billion in energy efficiency operating revenues.
- The energy efficiency workforce generated $14.9 billion in income revenue in 2018 – and this is direct and permanent employment only!
- Energy efficiency-related goods and services accounted for more than half of the total 2018 revenue for more than half of all firms surveyed.
- The majority of employers (52%) expect their energy efficiency revenues to increase over the next twelve months. (41% expect revenues to remain the same or do not know, and only 7% expect a decrease.)
- An increase of 8.3% in direct employment is expected for the Canadian energy efficiency sector as a whole in 2019 – that means 36,000 new jobs.
What kinds of jobs are we talking about? The majority of energy efficiency jobs in the U.S. and Canada are in construction (56% and 66% respectively), although professional and business services, manufacturing, wholesale trade, and other services (in descending order of significance) also made substantial contributions to employment in the field.
It is worth noting that retail trade, and manufacturers of fuel-efficient vehicle parts were not accounted for in the US Study. According to U.S. Bureau of Labor data, retail trade industries that sell and distribute ENERGY STAR appliances and building materials employ approximately 4.7 million Americans across several different sectors, and fuel-efficient vehicle manufacturing employs another half a million Americans. In the Canadian study, manufacturing and retail accounted for 9.9% and 6.3% respectively of existing energy efficiency-related jobs in 2018.
Common sticking point – we need more energy efficiency workers! A significant portion of employers in both Canada and the U.S. reported difficulties filling certain positions. These difficulties are attributed primarily to: lack of experience, training or technical skills; insufficient qualifications, certifications or education; and competition over a small applicant pool. It was also noted that the Canadian energy efficiency workforce was less diverse than the national average. But the potential for growth is clear. With a little help – perhaps an effort to boost enrolment in energy efficiency trades – the future of the industry is bright.
What else do we know about the Canadian EE industry? A few other studies have been done to examine the economic impacts of energy efficiency in Canada:
- Efficiency Canada released a study in 2018 on the national economic impact of expanding energy efficiency efforts to meet the Pan-Canadian Framework commitments and beyond. This study showed that if we aggressively ramp up energy efficiency efforts across the country, we could create 118,000 to 175,000 new jobs, on an average annual basis, between now and 2030.
- The Vancouver Economic Commission (VEC) recently published a forecast of the green building materials market under the influence of new energy efficiency policies, including the Zero Emissions Building Plan and the BC Energy Step Code. With this report, the VEC hopes to help building materials manufacturers and suppliers adapt to changing market conditions in B.C., remain competitive, and thrive as demand for low-performance materials dissipates and demand for new energy saving alternatives skyrockets.
Using the data to drive good policy. It is crucial that we use this data to position Canadian industry to play an active role in the changing global economy. Energy conservation initiatives are gaining traction all over North America and around the world, and new policies like the ones recently implemented in B.C. are guaranteed drivers of market growth and job creation.
Policymakers are taking note of the economic benefits of energy efficiency - from job creation, to attracting investment, to improving economic resilience, to reducing energy consumption and improving public health. But these benefits can be difficult to accurately quantify. That is why our friends at the American Council for an Energy-Efficient Economy (ACEEE) have developed a new policy toolkit to help governments quantify the economic development and job creation potential. The toolkit includes:
- Five practical approaches to estimating the economic impact of energy saving programs;
- The pros and cons of each method;
- An analysis of the most commonly used efficiency modelling tools; and,
- A survey of existing state initiatives to include economic development benefits in efficiency cost-effectiveness tests.
Interesting side note: The ACEEE estimates that a few key policy changes could add as many as 135,000 jobs in Florida alone (read the full report to find out how.)
Back to the Canadian context… There are many reasons why energy efficiency needs to be a part of Canada’s economic conversation. Immediate action on climate change is needed, with a recent report revealing that Canada will experience change at 2 to 3 times the rate of the rest of the world. Energy efficiency remains one of the best low-cost ways to help nations meet their emissions reduction targets.
And with the right kind of policy interventions, this monumental undertaking need not be a financial burden. We are faced with an unprecedented opportunity to diversify and strengthen our national economy, ensure a future for the Canadian workforce, foster innovation and put our country at the forefront of the global change taking place, and do our part to tackle the global environmental crisis. We’d be fools not to take it.